OTTAWA (Staff) — Within a few days, the federal government will announce the reinstatement of the interest-free cash advance program.
It is expected to cost Ottawa close to $60 million annually.
“The decision has been made and it is now a question of the timing,” said an official who has been involved in the effort to design a new farm income safety net program.
“It will be within 10 days (from May 26).”
The interest-free cash advance allows farmers to borrow, using unsold crop as collateral.
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It was a very popular tool for farmers looking for revenue to cover costs before the crop is sold.
The former Conservative government killed the program in the name of deficit-fighting, then reinstated it with a small interest rate attached.
During the 1993 election campaign, the Liberals promised to bring back the interest-free feature of the program.
Since then, agriculture minister Ralph Goodale has hedged his bets, asking farm groups whether they really want the program.
He said farm safety net funds are limited to $850 million and the cost of interest-free advances would come out of that pot.
At farm meetings last winter he asked if the cash advance program had enough of a priority that farmers would be willing to see funds for other programs limited in order to pay for it.
Farm groups almost unanimously said yes, the minister said.
Last week he told farm safety net committee members he will heed farmer advice and announce details of the cash-advance program soon.
